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Belize: The Continued Exploration Into Central America

By Carlo A. Mason - Email Editor

Date : June 2, 2009

Dear Valued Reader,

Belize is no stranger to the world of the offshore industry, but this "Jewel of the Caribbean", as it is called by the locals, is still a well kept secret. It boasts a high number of formed companies, having recently topped 54,000 in August of 2006. Belize entered into the offshore industry in 1990, with the introduction of its International Business Act, and in 1992 supplemented the law with the inclusion of the Trusts Act. These are two main staples of the offshore diet, and these bodies of legislation have allowed Belize to quietly become one of the preferred destinations of service providers and clients alike.  

The International Business Companies Act is based on the traditional concept of the IBC: A registered, credible entity with low reporting requirements for the owner. The features are as follows:

1. Incorporation of a company within a 24 hour period.

2. The low government fee of US$100.00 for incorporation (for a company whose share capital does not exceed US$50,000.00).

3. The ability to reserve a company name online for ten (10) days free of cost.

4. No requirement of annual returns to the Registry.

5. No subjection to local taxation, as all Belizean IBCs are exempt from local taxation.

The persons in the Belizean offshore industry are primarily locals, and are testimony to the overall high levels of efficiency and professionalism which one expects of this industry. The jurisdiction also boasts arguably some of the best trust legislation available today. The Trust Act is a prominent vehicle for Asset Protection, as classes of certain causes of action are expressly precluded from being brought. The benefits are as follows:

1. There is no incubation period between the transfer of funds from Settlor to Trustee, resulting in immediate settlement of the Trust, upon the said transfer of funds.

2. The Statute of Elizabeth, that defining element of common law jurisprudence, has been codified in Belizean law in the Bankruptcy and Law of Property Acts. However, its application to Trusts settled under the Trust Act has been expressly excluded by Section 7(7), which namely excludes the application of fraudulent conveyance principles which fall under those two pieces of legislation.

3. Section 7(6) expressly excludes the bringing of any action based on divorce or termination of marriage, succession rights (testate or intestate), or creditors' rights upon insolvency.

4. There is no recognition of non-Belizean judgments, as the application of the Reciprocal Enforcement of Judgments Act, the only manner in which non-Belizean judgments may be legally enforced in Belize, is expressly excluded by Section 7(7).

5. In keeping with the non-recognition of foreign judgments is also the fact that foreign law is not recognized by the Trust, according to the Trust Act. Only actions brought in Belize can and will be recognized by the court as binding and applicable upon any Trust settled under the laws of Belize.

6. There is provision for the appointment of a Protector, one who is able to oversee the actions of the Trustee, essentially protecting the rights and desires of the Settlor, once the Settlor hands over custody of the Trust property to the Trustee.

7. The Trust property, once outside the jurisdiction of Belize, is automatically exempt from any taxation, such as Income and Business Tax, Inheritance Tax, and even Stamp Duty, as specified by Section 64.

8. Trusts arrangements which seek to avail themselves of the Asset Protection elements of the Belize Law, under a 2007 amendment to the law, must be registered at the International Trusts Registry, established under that said 2007 amendment.

9. There is now provision for a Trust Agent, one who is responsible for receiving any legal service of documents for and on behalf of the Trust, and also operates as the first point of contact for the International Financial Services Commission.

There is much scope for development of the Belizean offshore offerings. The International Financial Services Commission, mindful of the need to stay current, has a proposal of Belizean LLC legislation, which it is hoped will be passed in the near future, will become a prominent feature of Belizean offshore life.

As normal, if you have any questions, give us a call or email us so we can discuss your particular situation and see if we can provide some solutions for your family.

Until next time,

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